Correlation Between ROKMASTER Resources and Hawkeye Gold

Can any of the company-specific risk be diversified away by investing in both ROKMASTER Resources and Hawkeye Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ROKMASTER Resources and Hawkeye Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ROKMASTER Resources Corp and Hawkeye Gold and, you can compare the effects of market volatilities on ROKMASTER Resources and Hawkeye Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ROKMASTER Resources with a short position of Hawkeye Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROKMASTER Resources and Hawkeye Gold.

Diversification Opportunities for ROKMASTER Resources and Hawkeye Gold

0.3

Correlation Coefficient

ROKMASTER Resources  Hawkeye Gold

Weak diversification

The 3 months correlation between ROKMASTER and Hawkeye is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ROKMASTER Resources Corp and Hawkeye Gold and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkeye Gold and ROKMASTER Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ROKMASTER Resources Corp are associated (or correlated) with Hawkeye Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkeye Gold has no effect on the direction of ROKMASTER Resources i.e., ROKMASTER Resources and Hawkeye Gold go up and down completely randomly.

Pair Corralation between ROKMASTER Resources and Hawkeye Gold

Assuming the 90 days horizon ROKMASTER Resources is expected to generate 1.17 times less return on investment than Hawkeye Gold. In addition to that, ROKMASTER Resources is 1.29 times more volatile than Hawkeye Gold and. It trades about 0.04 of its total potential returns per unit of risk. Hawkeye Gold and is currently generating about 0.07 per unit of volatility. If you would invest  4.00  in Hawkeye Gold and on September 23, 2024 and sell it today you would earn a total of  1.00  from holding Hawkeye Gold and or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ROKMASTER Resources Corp  vs.  Hawkeye Gold and

ROKMASTER Resources Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ROKMASTER Resources Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ROKMASTER Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Hawkeye Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawkeye Gold and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hawkeye Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ROKMASTER Resources and Hawkeye Gold

The main advantage of trading using opposite ROKMASTER Resources and Hawkeye Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROKMASTER Resources position performs unexpectedly, Hawkeye Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hawkeye Gold will offset losses from the drop in Hawkeye Gold's long position.

The idea behind ROKMASTER Resources Corp and Hawkeye Gold and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.